Correlation Between Tesla and Moderna
Can any of the company-specific risk be diversified away by investing in both Tesla and Moderna at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tesla and Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Moderna, you can compare the effects of market volatilities on Tesla and Moderna and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tesla with a short position of Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Moderna.
Diversification Opportunities for Tesla and Moderna
Pay attention - limited upside
The 3 months correlation between Tesla and Moderna is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Tesla is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tesla Inc are associated (or correlated) with Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Tesla i.e., Tesla and Moderna go up and down completely randomly.
Pair Corralation between Tesla and Moderna
Assuming the 90 days trading horizon Tesla Inc is expected to generate 1.25 times more return on investment than Moderna. However, Tesla is 1.25 times more volatile than Moderna. It trades about 0.24 of its potential returns per unit of risk. Moderna is currently generating about -0.15 per unit of risk. If you would invest 4,337 in Tesla Inc on September 24, 2024 and sell it today you would earn a total of 3,722 from holding Tesla Inc or generate 85.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tesla Inc vs. Moderna
Performance |
Timeline |
Tesla Inc |
Moderna |
Tesla and Moderna Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tesla and Moderna
The main advantage of trading using opposite Tesla and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Moderna can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Moderna will offset losses from the drop in Moderna's long position.Tesla vs. Marcopolo SA | Tesla vs. Randon SA Implementos | Tesla vs. Fras le SA | Tesla vs. Indstrias Romi SA |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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